We’d like to remind Forumites to please avoid political debate on the Forum.
This is to keep it a safe and useful space for MoneySaving discussions. Threads that are – or become – political in nature may be removed in line with the Forum’s rules. Thank you for your understanding.
📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!
BT share price woes
Comments
-
Glen_Clark wrote: »As I understand it if you sell some next week, the taxman will count them as the ones you have bought this week?
[*edit: Ah, I see you have looked at it again and edited your post ! :beer:]
Having bought shares today, if you sell them today the transactions are matched.
If you sold BT shares in the last 30 days - i.e. going back as far as Boxing Day, maybe you sold some between Christmas and New Year or earlier in January - then the ones you bought today would be matched with those sales in the last 30 days, creating a gain if the purchases were at 305p and the sales had been higher, and a loss if for some reason the sales were lower. This 30-day lookback when you buy something is the the anti bed-n-breakfast rule, which stops you crystallizing gains from shares bought five years ago in early January 2017 and then buying them back today as if they were brand new unrelated additions.
Assuming the sell-same-day-as-you-bought rule doesn't apply to today's activities, and the 30 day rule also doesn't apply because you haven't sold anything in the last 30 days that you're now buying back, today's purchases are just added to your "section 104 pool".
That is, they and their average purchase cost are just dropped into the big bucket with all your other holdings of BT shares, changing the average cost. Like if you had a big bucket of nuts and bolts or paperclips bought at different times - you don't track the individual nuts or clips, they are all homogenous in one big pool, with an average price each of 350p as you say.
So, you have a pile of shares accumulated at 405, 375 and 305p, with an average price of 350p. All you need to track is the practical reality that the average purchase price of any one share was 350p. So if tomorrow or next week you sell a share for under 350p you have a loss which you can offset against this year's realised gains or carry forward, and if you sell for over 350p tomorrow or next week it will be a taxable gain instead.
When you come to sell your shares next week (say 1st of Feb) you follow the rules laid out in the link that you posted. So for example you sell 100 shares at 310p on 1 Feb. You step through the rules:First
Shares acquired on the same day as the disposal (the ‘same day’ rule).Second
Shares acquired in the 30 days following the day of disposal (the ‘bed and breakfasting’ rule) provided the person making the disposal was resident in the United Kingdom at the time of the acquisition if the relevant acquisition was on or after 22 March 2007.Third
Shares in the Section 104 holding.
Yes you do. The shares in that pool acquired over the years have an average price of 350p. So compare the sales proceeds of 100 shares at 310p with the purchase price of 100 shares taken out of your big pool at 350p, and you have a capital loss of 40p x 100 shares equals £40 (ignoring broker fees on disposal).
Then you go on down the listIf the above rules fail to exhaust the shares disposed of, the remaining shares are matched with later acquisitions, taking the earliest one first
The only time all three matching rules would fail to use up the shares you sold on 1 Feb, was if you didn't have any shares at all going into 1 Feb and the 100 shares you sold at the broker had effectively been just borrowed and sold short, to be bought back later in the year before the broker got too mad about it. In that case you would match the sale of the 100 shares on 1 Feb with your later acquisitions on, say, 30 June 2017 when you decided it was best to close out your exposed position.
Would have strayed into 20% CGT for sure.
Shivers :eek:
If you then changed your mind and bought the shares sold on 1 Feb back again on 1 March (i.e. within 30 days of 1 Feb), you would get hit by the 30 day rule and the purchase on 1 March for, say, 300p would be matched to the 1 Feb sale at 310p.
That special rule which is used in priority to the standard "average cost" rule (number 2 instead of 3 on the list) means the share sale at 310p on 1 Feb would no longer be matched to the 350p average price of your "s104 pool", creating a loss, but instead to the specially-considered later purchase that happened within 30 days AFTER the sale. Perhaps creating a gain or breakeven or whatever depending on actual price.
Basically the bottom line is that the 30 day rule is to do with buying 30 days AFTER selling, and nothing whatsoever to do with selling something you bought in the 30 days BEFORE sale.0 -
Doshwaster wrote: »For a supposed communications company, I have always found BT one of the worst businesses to contact. It's impossible to find the right number to call to speak to someone about a particular issues and you always spend ages being bounced around from department to department being told that you've reached the wrong people.
LOL, try phoning Vodafone, no chance, all automated. As for live chat you can spend hours chatting to many agents for a simple query which they still never resolve...
Cheers
PS I bought a few BT shares today to tuck away for the long term... Wish me luck0 -
I can remember years ago when BT share price reached the dizzy heights of £16 plus (yes pounds).
An old codger I knew used to traipse to the library most days to check the price in the FT.
He had watched the price steadily rise over the years to £16 plus but daren`t sell any in case they kept rising even more.
Needless to say he never sold any and then gradually watched them go all the way down again.0 -
bowlhead99 wrote: »No. If you go ahead with your plan, as you explained it, you would not have generated any gain or tax to pay (assuming you sell next week for less than 350p). Instead you would generate a loss because on average, that sale price of 310p is well below what you paid to buy your BT shares (350p average) even though it happens to be higher than the 305p you paid today to buy a few more.
Glen Clark's remark made me re-check my reasoning, which is no bad thing. Tax rules make my teeth hurt. I try to sell the whole lot, and then buy back after 32 days, just so I don't have to plough through years of record.
It was a theoretical scenario which seemed a bit weird.
I appear to be able to buy and sell, make a profit and not pay CGT!
Assuming:
Buy 10,000 shares at £30,500, today
Sell 10,000 shares at £35,000, next week.
So the gain is £4,500, and I would normally pay 20% CGT, because I have used up my basic rate, just about.
As we now agree, because of the way the pooling averaging tax rule, I can bank the £4,500 profit this tax year, and pay no CGT!
So, I end up with the same number of shares as before this manoeuvre, so will get the same dividend as before, but for less capital tied up, because of the £4,500 "withdrawn", without incurring tax!
Come on, don't you agree it's NEAT!
I know there's stamp duty in there somewhere, which technically is TAX. Don't make me call you a pedant.0 -
I'm a buy and hold small time investor.
2012 bought £1000 BT.a @ 217p , the yield on that £1k is now 6.5%.
Bought today @ 308p, another grand.10th January 2017
Is it too late to make a new year resolution ?
Rather than a flounce.0 -
TESCOBABE56 wrote: »Bought today @ 308p, another grand.
Bargain hunters unite.
Looks like we got ourselves a CONVOY.
Who wants to be Kris Kristofferson?0 -
So, I end up with the same number of shares as before this manoeuvre, so will get the same dividend as before, but for less capital tied up, because of the £4,500 "withdrawn", without incurring tax!
Come on, don't you agree it's NEAT!
It's not particularly 'neat' or magic that you don't have to pay capital gains taxes when the quick wins on your new holdings are cancelled out by substantial losses on your old holdings, for which you paid more than they're now worth. If you sold them all next week you'd make losses equivalent to the gains you made on this week's purchases. Overall it is no gain no loss.
When I was writing the explanation earlier today on how the 30% rule actually works, I thought to myself that your frustratingly eccentric posting style generally leaves us without much clue as to whether you really understand the concepts or not ; whether you are perhaps looking to be educated from time to time - or just enjoying being blissfully ignorant and getting on absolutely fine because you have accumulated plenty of assets to get by, so can be carefree and cavalier as long as you have some shrewd purchases and a decent dose of luck.0 -
Complete aside, but I could never buy shares in a company with such a bad website! Their whole ordering and customer services screams of a very badly managed company.
IMHO, the basic investment case, if there is 1, is that it (the fixed line phone network) is a monopoly, so it doesn't matter if their website / customer service / whatever is rubbish.
ok, i am over-simplifying. there are also cable and mobile networks now, but the POTS still has some advantages. and customer service may matter if you're going for N-play (fixed line + mobile + TV + internet + pet grooming, or whatever it is now).
no change in my BT shareholding since buying in 2008 (except that i bed-and-ISA'd it at a later date - so the original cost is now irrelevant for tax purposes).
they could cut the dividend, of course. it's happened before. the last time was in 2009, just after i bought. but the historical yield was c. 10% when i bought, because the market was anticipating a cut. the total annual dividend was then cut from 15.8p to 6.5p; since when it has been gradually rising, to the current 14.45p - still less than the previous peak. is there really any upward trend here?
dividend history: http://www.btplc.com/Sharesandperformance/Dividends/Datesandpayments/Datesandpayments.htm0 -
bowlhead99 wrote: »When I was writing the explanation earlier today on how the 30% rule actually works, I thought to myself that your frustratingly eccentric posting style generally leaves us without much clue as to whether you really understand the concepts or not ; whether you are perhaps looking to be educated from time to time - or just enjoying being blissfully ignorant and getting on absolutely fine because you have accumulated plenty of assets to get by, so can be carefree and cavalier as long as you have some shrewd purchases and a decent dose of luck.
I was itching to sell some BT.A at £4 a few weeks ago, faithful to my own half and half potential loss reduction hedge, but the gain would have strayed into 20% CGT tax, which would annoy me a lot. Crossed my fingers that I could wait till April. 400p down to 305p is about 25% down, vs 20% CGT if I sold. It was like holding it in till the next motorway service.
If I sing from the same hymn sheet all the time, it seems pointless to post at all. I would like to read a variety of approaches, in any field, and make my judgement how foolish it is. To me, Donald Trump's first few days look like Caligula taking power, and his cavalier attitude to climate change is not just frustrating, it TERRIFIES me. I can only hope that it becomes an object lesson in what not to do: and people only know it's a bad idea if they read about it.
I try to explain my reasoning, and you can poke holes and find deficiency, which is how it's supposed to work. Call me reckless if you like, but I am having fun with my money, that's all I can say.
Don't know why people go to casinos, I get better returns in property and stock market. I keep hearing you get free food in casinos, so I suppose I really should check it out.0
This discussion has been closed.
Confirm your email address to Create Threads and Reply

Categories
- All Categories
- 352K Banking & Borrowing
- 253.5K Reduce Debt & Boost Income
- 454.2K Spending & Discounts
- 245K Work, Benefits & Business
- 600.6K Mortgages, Homes & Bills
- 177.4K Life & Family
- 258.8K Travel & Transport
- 1.5M Hobbies & Leisure
- 16.2K Discuss & Feedback
- 37.6K Read-Only Boards